So you’ve decided to explore frugal living, well we have 5 steps to frugality for you. In this day and age there are more and more people interested in frugality, simply because the cost of living is ever increasing. Frugal living is an extremely fulfilling lifestyle choice. Rewarding us “Frugalista’s” with valuable experiences whilst achieving our financial goals. Not to mention, adding more value where it matters to our day to day lives. 

Here are our 5 steps to frugality

5 Steps to frugality

Step 1. Track Spending

To start off your steps to frugality, you need to gain a proper understanding of where every dollar of your income is going. Do this by tracking your expenses. 

Expense tracking is a must if you want to get the most out of the money you earn. You can track your spendings using in a couple different ways:

Using budgeting apps like Pocketbook that sync to your bank account and automatically show you every transaction you have made. 

We did a whole review on Pocketbook not long ago here!

If you don’t want to use an app you can just keep track of your expenses by jotting them down in the Notes on your phone. 

Or you could just go old fashion, carry a pen and notebook with you and write down every time you spend. No matter how little. 

Once you have tracked your expenses for a couple weeks you will be able to categorize your spending. Basically, you will be able to now see where all your money is going! You’d be surprised how much of a revelation this will be. You will be able to now see where you can lower your outgoings by cutting on expenses that don’t even provide you with any benefit, like unused subscriptions you forgot about.

“Success isn’t found in the eyes of others: buying things you don’t need, with money you don’t have, to impress people you won’t know in 20 years’ time.”

 Scott Pape, The Barefoot Investor

Step 2. Start A Budget 

It’s time to start a brand new budget. There are many types of easy to budget. We have a breakdown of the 50/30/20 budget here.

We have also just completed a full budget overhaul to start our 2021.

When arranging your regular expenses I would suggest putting each expense into a category. Then in that category ordering them by order of priority, with the most important at the top. You should only have 3 categories: Wants, Needs and Savings.

Your wants are things that are not absolutely necessary. Things like gym memberships, streaming subscriptions and restaurant dinners. Needs are your must haves. Things like Rent/mortgage, power, water ect. Finally, Savings. Savings can be extra debt repayments, investments and/or saving into your emergency fund. (Emergency funds are a principal need for basically everyone! We broke that down too!)

List out every single regular expense you have. List out your regular primary income + any secondary incomes you may or may not have. Minus all your expenses from your income then you have the figure left which is your spending money. Boom, budget (albeit extremely simple). 

When setting up your budget do not leave yourself with very little or absolutely no spending money. That’s a fast track to losing. Be smart and realistic about your budgeting. Incorporate your financial goals into it as well. If an expense of yours does not contribute to your financial, health or spiritual goals then reassess its necessity altogether.

Setting a budget is one thing, sticking to it is another. Keeping motivated is the key to your budget success. 

Budgeting steps to frugality
Contrary to popular belief, your budget can be very simple! The important part is just having one!

Step 3. Cut Cost’s 

So you’ve tracked your expenses and set a budget. You now know where every dollar of your hard earned moolah is going. Now we can begin to ‘trim the fat’ as they say. In your list of tracked spendings, go through each day highlighting which expenses you can live without. Was there a day you went out and bought lunch when you could have just made it at home? That’s the type of expenses we’re looking for. 

Subscriptions you don’t use, cut them. Shopping, buying items you never wear or never use, cut them. Your goal is to cut all unnecessary costs. I’m not saying to go without everything nice in life. I am just saying that if it does not provide you with fulfilling value, cut it.

Another good way to cut utility costs is to use comparison sites to get the best deal. Sites like and are great! We have used them plenty to get our household bills down.

5 steps to frugality

Step 4. Create Value 

Now all the boring stuff is done we can have some fun! Creating value, in my opinion is the entire philosophy behind frugal living. Have less to have more. Make sense?

Creating value is all about subtracting from your life possessions, experiences and expenses that do not provide you with a fulfilling feeling. Adding in ones that do! 

For example, I recently decided that I wanted a motorbike. I know, not very frugal. But the experience of having one provides me with fulfilling value and memories. So I worked around my budget, cutting costs where need be to be able to afford it. I am no worse off financially and created that value I craved. 

I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.

Jeff Bezos

Another example, I don’t fancy myself much of a tv buff. Quite often I’d rather read. So, as a result we do not pay for any streaming services. We still have one or two (thanks to some generous friends that don’t use all their users on their family accounts) and mostly when we do watch tv, watching free to air channels anyway. We choose to keep that financial expense for another area of our day to day lives that we value.

Let’s say you want to take a holiday (after covid restrictions finally ease that is). But you currently only see the dollar value and not the experience value so you decide not to. That would be subtracting value from your life, wouldn’t it? The answer, make it happen, do the math and work out how much you’d need to save to achieve it. Subtract financial value from aspects of your life that provide no experience value and add them to areas that do. 

Step 5. Be Creative 

Possibly the most important in your 5 steps to frugality. One of my favorite sayings, Think outside of your wallet!

Your outgoings do not always have to revolve around spending money. Find experiences that provide you lasting value and memories that cost little to none. Be creative with your date/family/friends nights

Dinner and a movie can be so much more when you are not thinking of how much to spend. Make dinner at home, set up the tv out the back and have a home cinema night! (one of our faves). Getting creative with how to experience life will reward you tenfold. 

Think of something right now that you pay for, guarantee there is a frugal alternative to have that same experience. Obviously within the means of the law (haha). But in all seriousness, you get out what you put in.

5 steps to Frugality

Track Spending, Start a budget, Cut cost’s, Create Value and Be Creative!